Alector is kicking off a resource realignment effort that will include a workforce reduction of around 17%. The biotech expects its current cash position to last it through 2026.
Alector on Monday announced that its investigational antibody AL002 failed the Phase II INVOKE-2 study, as it did not significantly slow clinical progression in patients with Alzheimer’s disease.
Data were sparse in the press announcement, with the biotech only revealing that AL002 “failed to meet the primary efficacy endpoint,” which was measured using the Clinical Dementia Rating Sum of Boxes tool. AL002 also showed no treatment effects on key secondary and functional effects, nor did it significantly improve liquid and imaging biomarkers, including brain amyloid levels.
As for safety, the INVOKE-2 study found evidence of amyloid-related imaging abnormalities (ARIA) and infusion-related reactions in patients treated with AL002.
Alector’s stock crashed 31% in after-hours trading on Monday after the data drop, Seeking Alpha reported.
In a note to investors, Stifel Partners analysts called the INVOKE-2 readout an “outright failure” and a “significant setback” for Alector. “We had thought the AL002 trial in [Alzheimer’s disease] had a real chance at success based on strong genetic and biomarker evidence for the target,” the analysts wrote, pointing also to the approximately 20% ARIA rate associated with the asset, “which was suggestive of an effect on amyloid.”
“While the [press release] lacks detail, it sounds as though the study was a definitive failure,” Stifel wrote. Alector is now nearly solely dependent on its frontotemporal dementia candidate AL001 and its “blood-brain-barrier platform where we know little.”
With these disappointing mid-stage findings, Alector is discontinuing its long-term extension study for AL002. The biotech also revealed on Monday that it is implementing a resource realignment initiative, which will involve laying off around 41 employees, corresponding to approximately 17% of the biotech’s current workforce, according to an SEC filing.
The layoffs will be implemented in the first half of 2025, during which Alector expects to sustain $3.9 million in one-time restructuring costs, primarily related to severance payments, salaries and other personnel expenses. As of Sept. 30, 2024, Alector had some $457 million in cash, cash equivalents and investments, which should be able to keep it afloat through 2026, the company stated.
AL002 is an investigational humanized monoclonal antibody designed to target and boost the function of the TREM2 protein, a key membrane receptor in microglia cells, which help maintain neuronal networks and repair tissue injuries in the brain.
Patients with Alzheimer’s disease typically show several TREM2 mutations and impaired receptor function, which in turn have been associated with a higher disease risk. Conversely, a higher concentration of TREM2 in the cerebrospinal fluid has been linked with lower amyloid and tau build-up in the brain, alongside generally slower cognitive and clinical decline.
AbbVie in October 2017 bought into the promise of AL002’s mechanism of action, paying $205 million upfront for the global option to develop and commercialize it and another Alzheimer’s disease candidate. In July 2022, however, the pharma decided to drop AL003—but retain AL002—from the deal. As per its pipeline page, Alector is also no longer working on AL003.
